Coal pricing emits heat

New Delhi, Feb. 6: The government's in-principle approval to coal price pooling will impact the financials of public sector power plants and result in electricity tariff revision, industry representatives said.

"What we should not miss is that pooling of coal prices results in subsidisation of expensive imported coal by cheaper domestic coal. In addition to greater incomes to other nations, this will also mean creation of more jobs in foreign lands. Besides, this will further reinforce the inherent inefficiencies in the present exploitation of our domestic coal reserves," Ficci president Naina Lal Kidwai said.

According to Ashok Khurana, director-general of the Association of Power Producers, the approval will help the stranded power plants. The incremental cost of imported coal will preferably be absorbed over the entire domestic production.

The cabinet committee on economic affairs (CCEA) has finalised the blueprint of the pooling mechanism, which will average the prices of domestic and imported coal to get a uniform feedstock price in the country. However, it has deferred a final decision.

"The in-principle decision has been taken. There is some data that has to be put into these principles," Manish Tewari, minister of state for information and broadcasting, said.

"The structure of the decision has been put in place. The ministries of coal and power will come back with specific details. Basic principles and parameters have been identified. The CCEA will again deliberate on the issue," he said.

Several states, including Bengal and Odisha, are opposed to coal price pooling as it will impact public sector power units.

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